A Small Victory Against Corporatism

by Gene Howington, Guest Blogger

On Friday, a small victory was had against the ever encroaching corporatism threatening our democracy.  Rep. Chris Van Hollen (D – MD) brought suit against the FEC last year. In his suit, Van Hollen charges that in 2007 the FEC created a loophole allowing undisclosed donors to contribute money for “electioneering communications” to organizations like Karl Rove’s 501(c)(4) advocacy group Crossroads GPS and to 501(c)(6) business associations like the Chamber of Commerce for the purposes of by willfully misinterpreting disclosure requirements in the Bipartisan Campaign Reform Act of 2002 (a.k.a. McCain-Feingold). “Electioneering communications”  are broadcast ads that refer to a federal candidate in the period 60 days before a general election or 30 days before a primary election.  These ads may call for either the election or defeat of a specific candidates.

In 2007, the FEC added a regulation that complicated the situation. The rule in question – C.F.R. Title 11 § 104.20 (c)(9) – (found at 2 U.S.C. 434(f)) – says “If the disbursements were made by a corporation or labor organization pursuant to 11 CFR 114.15, the name and address of each person who made a donation aggregating $1,000 or more to the corporation or labor organization, aggregating since the first day of the preceding calendar year, which was made for the purpose of furthering electioneering communications.”  Clearly the FEC is saying that disclosure is only required if a donation is explicitly made “for the purpose of electioneering communication.”  Being that few, if any, donors to these groups ever earmark their donation for a specific election expense there has been little or no disclosure of the donors to these groups.

There is a problem with that regulation though.

C.F.R. Title 11 § 104.20 (c)(9) contravenes rulings made by SCOTUS in conjunction to the Citizens United case which specifically upheld parts of McCain-Feingold that required transparency and disclosure.  Justice Kennedy, in writing for the majority in the much (and rightfully) maligned Citizens United said specifically that “The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” Citizens United v. FEC, 558 U. S. 8-205, 55 (2010).  On Friday, the U.S. District Court for the District of Columbia ruled for Van Hollen in holding that the FEC regulations that restricted campaign donor disclosure are invalid and must be changed to provide for disclosure.

(c) Washington Post/ABC News (used without permission)

Not only is the climate of unlimited corporate spending created by Citizens United extremely unpopular with the public, so are the 501(c)(4) advocacy organizations behind this kind of electioneering.  Recently, the Washington Post and ABC News conducted a poll asking the following question: “Organizations known as Super-PACS can raise and spend unlimited amounts of money on behalf of candidates they support. (Supporters say this is a form of free speech) while (opponents say this allows groups or wealthy individuals to have unfair influence.) Do you think it should be legal or illegal for these Super-PACS to operate?”  The response was that nearly 7 in 10 Americans (69%) felt that Super-PACS should be illegal. Although I have seen no polling numbers regarding 501(c)(6) business associations like the Chamber of Commerce and their popularity, given the nature of the issue and the statistically significant negative response concerning Super-PACS, I cannot imagine that more traditional business organizations like the Chamber of Commerce interfering with the electoral process would fair much better.

Fred Wertheimer of Democracy 21 group is a long time campaign finance reformer and among the backers of Van Hollen’s lawsuit.  “We are going to pursue this very aggressively. Our goal here is to try to get decisions in advance of the 2012 presidential and congressional elections,” said Wertheimer. “This is the first step in a series of steps that we intend to take to try to ensure that secret money is ended in our federal elections,” he said. “The danger here is well known: Secret money sloshing around in American politics is going to result in corruption and scandals, as it has in the past.”

Van Hollen also supplemented his lawsuit by requesting in a petition filed Thursday that the FEC revise its regulations on “independent expenditures” in federal elections as well. Unlike “electioneering communication,” “independent expenditures” don’t have to fall within the proscribed time window and can be spent anytime during the campaign cycle.  This change was not included in the original complaint  because independent expenditure regulations are older and require such a petition as a precursor to legal action.  Will the FEC address this petition or is another lawsuit the likely result?  Remedial action by the FEC  is widely considered the least likely solution to these problems. Having a long history of politicized dysfunction, the six-person commission is currently almost completely deadlocked as its three Republican commissioners have blocked any attempts to move toward further transparency and disclosure. Why the partisan resistance to transparency?  It is not hard to surmise that the resistance  stems from a cynical calculation about which party benefits more from secret corporate campaign contributions.  Not only is the FEC currently deadlocked, the nomination process for installing five new commissioners when current terms expire in April is being stonewalled by long time obstructionist Senate Minority Leader Mitch McConnell (R-KY).  While it is tradition for the White House to wait for the Senate Minority Leader to make recommended replacements for FEC panel members for his party’s seats, so far McConnell is refusing to do so.

Although the win for Van Hollen is a small victory against corporatism and the further corruption of our electoral process by corporate campaign spending, it is clearly only a single step in a journey that requires many.

Is this a step in the right direction to wrest our democracy from corporate hands and put it back in the hands of We the People where it belongs? Is it enough?  Is it not enough? Does more need to be done by Congress to overturn the damage to our electoral process inflicted in the aftermath of Citizens United and regulations like C.F.R. Title 11 § 104.20 (c)(9)?  What can citizens do to influence Congress to limit corporate influence over government and restore the power to the hands of the people where it should rightfully rest in a democracy?

What do you think?

Source(s):  Huffington Post (1)(2), 2 U.S.C. 434, Van Hollen v. FEC, Citizens United v. FEC, Washington Post

~Submitted by Gene Howington, Guest Blogger

22 thoughts on “A Small Victory Against Corporatism”

  1. Maybe a small step on the way to throwing out Citizens United? (hope springs eternal.)

  2. Gene, I think the proper headline might be “A Small But Potentially Intervening Victory” but that’s kinda’ clunky and springs from my complete pessimism about the high court and Congress. I’ll hope though that you’re headline is correct while breathing normally. 🙂

    I have no such reservation’s about the Professor’s decision to use guest blawgers though- epic win by and for all today! Excellent article as always Gene.

  3. I have always admired Mr Van Hollen. Met him once. He is a Swarthmore and Georgetown Law grad. Yes ,it is a small victory but certainly well worth mentioning. See, Gene, not every democrat is the same as a republican. lol

  4. This isn’t a victory until the decision gets through the courts completely and if upheld, Congress remedies it. I’m not holding my breath.

  5. Gene,

    I’d say small victories are about all that we can hope for these days. Still, the folks/corporations who invest money in politicians usually find ways to work around the rules.

  6. So, my question is: after we discover who has purchased our democracy, how do we buy it back?

  7. Is the FEC and its deadlocked panel a creation of a Congress that wishes to seek such deadlock? If the law does not read that way, then how did we get this mess?

  8. Great job Gene. While I commend Hollen for filing the suit, I suspect that this will also make its way up to the Supremes. Blouise is right. We have to follow the money and disclosure is the only way we can be sure who is actually buying our democracy.

  9. I suspect this will go all the way up to SCOTUS after making an appearance in the D.C. Court of Appeals.

    If memory serves me right, the FEC was created after the abuses of that good old Republican, Dick Nixon, had his Watergateloo. Remember all the untraceable money that was floating around the offices of CREEP and finding its way to Segretti, Hunt, and the Plumbers, and God knows who else.

    We know what happens when money flows into politics without a means for discovering its source. Watergate taught us exactly where such unaccountability leads.

    Good on Van Hollen and any other representative of the people who brings common sense and a good memory of past lessons learned to their job. We need many, many more of them.

  10. AY,

    I think that point is somewhat being addressed by Van Hollen’s petition to the FEC concerning independent expenditures.

  11. There is still nothing that prevents “soft” money….. Distinction without much of a difference……

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